Australia eyes breakup of Big Four accounting firms after ethics scandals

The proposed intervention follows a series of damaging controversies, most notably the 2023 PwC tax leaks scandal, where confidential government policy was leveraged to secure private clients. KPMG faces similar scrutiny over allegations that it shared sensitive company data to win auditing contracts. Assistant Treasurer Daniel Mulino noted that recent conduct across the sector has compromised market integrity and eroded public trust, prompting a need for stricter federal oversight.

Currently, firms including Deloitte, EY, KPMG, and PwC operate as partnerships under state-based laws, shielding them from the more rigorous reporting requirements enforced by the Australian Securities and Investments Commission. The Treasury paper suggests moving these entities under federal regulatory purview. Beyond structural separation, the government is considering reducing the maximum number of partners from 1,000 to 400, mirroring limits found in the legal profession. Greens senator Barbara Pocock has demanded immediate action, arguing that the industry’s current special treatment must end. Consultation on these reforms remains open until August 12.